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Power Purchase Contract for the United Kingdom

Power Purchase Contract Template for England and Wales

A Power Purchase Contract governed by the laws of England and Wales is a legally binding agreement between a power generator and a purchaser, establishing terms for the sale and purchase of electricity. It details specific requirements for power delivery, pricing mechanisms, payment terms, and operational parameters. The agreement incorporates relevant regulatory requirements under UK electricity market legislation and includes provisions for metering, reporting, and compliance with grid codes.

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What is a Power Purchase Contract?

Power Purchase Contracts are essential instruments in the energy sector, used when entities need to establish long-term electricity supply arrangements. These contracts, when governed by English and Welsh law, provide a comprehensive framework for power trading relationships, incorporating both commercial terms and technical requirements. A Power Purchase Contract typically includes provisions for quantity, availability, pricing, delivery points, and risk allocation. It's particularly relevant in contexts ranging from traditional power generation to renewable energy projects, and must comply with UK electricity market regulations and licensing requirements.

What sections should be included in a Power Purchase Contract?

1. 1. Parties: Details of the power generator/seller and purchaser

2. 2. Background: Context of the agreement and basic commercial intention

3. 3. Definitions: Key terms used throughout the agreement including technical, commercial, and regulatory definitions

4. 4. Sale and Purchase Obligations: Core obligations regarding electricity supply and purchase, including delivery points and minimum/maximum volumes

5. 5. Term and Termination: Duration of the agreement, extension options, and circumstances for early termination

6. 6. Price and Payment: Pricing mechanism, payment terms, invoicing, and dispute procedures

7. 7. Metering and Reporting: Requirements for measuring electricity supplied, reporting obligations, and record keeping

8. 8. Force Majeure: Provisions for unforeseeable circumstances and their impact on contractual obligations

What sections are optional to include in a Power Purchase Contract?

1. Green Certificates: Provisions relating to renewable energy certificates, ROCs, or other environmental attributes

2. Development Obligations: Construction milestones, commissioning requirements, and development phase obligations

3. Credit Support: Security arrangements, parent company guarantees, and credit requirements

4. Change in Law: Provisions dealing with regulatory changes affecting the contract performance

What schedules should be included in a Power Purchase Contract?

1. Schedule 1: Facility Description: Technical specifications and details of the generating facility

2. Schedule 2: Testing Procedures: Commissioning and performance testing requirements and procedures

3. Schedule 3: Pricing Formula: Detailed pricing calculations, adjustments, and indexation mechanisms

4. Schedule 4: Operating Parameters: Technical operating specifications, maintenance schedules, and performance standards

5. Schedule 5: Metering Specifications: Technical requirements for metering equipment and protocols

6. Schedule 6: Form of Performance Security: Template forms for any required guarantees or security instruments

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

England and Wales

Publisher

Genie AI

Cost

Free to use

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